of rising prices, which of the followlhy Il pr 5. In a period erally results in
ID: 2436762 • Letter: O
Question
of rising prices, which of the followlhy Il pr 5. In a period erally results in the highest gross margin figure? . Cannot tell without more information b. LIF0 c. FIFo d. Average-cost 6. Which of the following inventory methods when used for income tax purposes must also be used for reporting purposess a. Specific identification b. LIFC c. FIFO d. Average-cost 7. In which of the following cases would the gross profit method most likely be used? a. In a company with good accounting records b. In applying the average-cost method c. In estimating the market value of inventory for applica tion of the lower-of-cost-or-market rule d. In estimating an inventory loss from fire 8. A company has cost of goods available for sale of $250,000, sales of $305,000, and a gross profit percentage of 30 percent. Using the gross profit method, what is the ending inventory? a. $95,000 b. $50,000 c. $36,500 d. $158,5001Explanation / Answer
Q5. Answer is C. FIFO. Q6. Answer is C. FIFO Q7. Answer is d. In estimating the inventory loss from fire. Q8. Answer is C. $ 36500 Explanation: Cost of goods available for sale 250000 Less: Cost of Goods sold (305000-30%) 213500 Ending inventory 36500
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